S.P. Richards—a major office products distributor that nearly merged two years ago with its larger, ecommerce-focused rival, Essendant Inc.—was sold this week by parent Genuine Parts Co. in two separate transactions, GPC said.
For GPC, the move will finally let it get beyond the disrupted office products market to focus on its core automotive and industrial businesses, which include GPC’s flagship NAPA Auto Parts brand and the NapaOnline.com ecommerce site in its Automotive Parts Group.
“The sale of S.P. Richards represents the further streamlining of our operations and a significant step forward in our long-term strategy to optimize our portfolio,” said Paul Donahue, chairman and CEO of GPC. “With this divestiture, we will continue to opportunistically expand our global footprint and strengthen our focus on sustainable, value-driving initiatives associated with our faster growing and higher margin automotive and industrial businesses.”
Two operating groups for two buyers
S.P. Richards distributes more than 98,000 business products to 9,000 resellers and distributors throughout the United States. Its core business, which GPC sold to an investment group of office supply industry professionals and investors, is in four main product categories: general office products; technology products and accessories; office furniture; and janitorial-sanitation and safety supplies.
A separate S.P. Richards business, known as the Safety Zone and Impact Products operations—which GPC sold to an affiliate of investment firm H.I.G. Capital— specializes in providing personal protective equipment, janitorial, safety, hygiene and sanitation products to businesses including distributors and resellers specializing in selling to the foodservice, janitorial, sanitation and safety products markets. “Given the critical role of these businesses in the COVID-19 pandemic, we remain committed to ensuring continuity of service to customers while prioritizing the wellbeing of employees,” said Rahul Vinnakota, managing director of H.I.G.
GPC’s Industrial Parts Group includes Motion Industries Inc., a distributor of industrial parts ranging from metal-cutting tools to motor vehicle transmission gears; it sells online at MotionIndustries.com.
The split with Essendant
S.P. Richards, which operates a customer portal at SPRdealerservices.com, has a long-time record of serving business customers that had attracted it to Essendant. The two companies had planned to merge in 2018—when Essendant reported about $5 billion in revenue, and S.P. Richards about $2 billion—to benefit from operating synergies. However, Essendant scuttled the deal to instead accept a late acquisition offer from Sycamore Partners, which also owns office products company Staples Inc.
A court case filed by GPC against Essendant for breaking its merger agreement is still pending; a separate shareholders’ case against Essendant was dismissed earlier this year.
In an interview earlier this year with Digital Commerce 360 B2B, Essendant president Harry Dochelli said Essendant and Staples are working together to help “level the playing field” for thousands of office products resellers in a highly competitive market. It’s a market disrupted by changing demand for office products in an increasingly digital world adjusting to work-at-home demands.
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